Green Acres Really May Just Be The Place To Be
September 21, 2006
The cost of one-bedroom apartment rentals in Manhattan’s doorman buildings is surging, with starting prices for these apartments hovering around $3,000 a month — about $500 more than they were just three years ago, city brokers say.
A bevy of condominium conversions has shrunk the number of available rental units, thereby driving up rents, a researcher at the Real Estate Board of New York, John Cole, said. “There’s been so many conversions, with a good number of them having gone from rentals to condos,” he said. “With less supply, the prices have gone up, and the vacancy rate has become infinitesimally small.”
One-bedroom apartments account for about half of the rental units in the city, according to the “Black & White Report,” a real estate guide published semiannually by Citi Habitats.
Five years ago, roughly one in 100 rental apartments were unoccupied. Today, only about one in 220 of these units are available for rent, according to a sales agent with DJK Residential, Daniel Kahn. “Inventory is so low that, even people who have the money, and have all the paperwork prepared, are still having trouble finding places,” he said.
So tight is the market in the one-bedroom category that it can be a challenge just finding listings to show clients, Mr. Kahn said. “We used to be able to go out and show clients 10 places, and now we can only show them, maybe, four.”
As a rule of thumb, New York landlords require their would-be tenants to earn a gross salary of 40 to 50 times the price of one month’s rent. By those standards, a person looking to rent a $3,000 one-bedroom apartment would have to earn between $120,000 to $150,000, or else secure a co-signer to guarantee the rent will be paid. Mr. Kahn said he recently worked with a couple, both professionals in their late 40s, who had to secure a guarantor to seal a rental deal. “I’m constantly dealing with people who don’t want to have to ask their parents,” he said. “To avoid this, some offer to pay six month’s rent upfront.”
While luxury one-bedrooms will generally run closer to $3,000 in areas like the West 40s, the East 30s, or the Upper East Side east of Second Avenue, an asking price of $4,000 is not uncommon in some of Manhattan’s more sought-after areas, Mr. Kahn said.
During the last six months of 2005, the average price of a one-bedroom unit in a doorman building in the West Village or Chelsea —two of the priciest rental neighborhoods — was more than $3,200, according to the “Black & White Report.”
The skyrocketing cost of a one-bedroom in a full-service building also means fewer people can afford to graduate to two-bedroom apartments. The lack of transfers further cuts down on the number of available units. “It used to be you could raise your budget $400 or $500 and get a bigger place,” Mr. Kahn said. “These days, people are raising their budget, and they’re not getting anything different.”
Even at the higher price points, Manhattan one-bedroom rentals are generally spoken for within five days, he said.
“It takes me longer to decide what kind of coffee I’m going to get at Starbucks than whether or not I’m going to take the apartment,” a 30-year-old schoolteacher, Benjamin Joffe, said. “I wish I had time to process it. That’s what killed me about the whole process.”
In most other cities, Mr. Joffe said his salary would enable him to rent a one-bedroom in a full-service building; in New York, however, he’s settled on a ground-floor studio in a no-frills building near Columbia University. At $1,400 a month, he said he considers the rent a deal.
The high cost of living, in part, accounts for the Cleveland native’s “ambivalence” about living in New York City. “The difference between the haves and the have-nots, it’s depressing,” he said.
For others, the short supply of rentals has been a boom, a broker at Prudential Douglas Elliman, Judy Kendall Levine, said. “It’s really an owner’s market now,” she said.
Ms. Levine has just listed for $3,800 a furnished, one-bedroom apartment in a postwar building with a doorman. “It’s a good apartment, but does it have park views? No. Is it on a high floor? No,” she said of the cond-op apartment on Third Avenue in the 80s. “In this market, they’ll probably get what they’re asking for.”